Question

1. Explain the significance of treating a CPNC as a “privilege” rather than as a property right.
2. Why do most cities closely regulate the cab industry?
New Orleans recently imposed new rules on all taxi cabs used to pick up passengers at Louis Armstrong International Airport. The rules require, among other things, credit card machines in the cabs, GPS devices, security cameras, working air conditioners, working meters, and drivers who speak English. In 2014, cabs cannot be older than seven years, regardless of condition. New Orleans has capped its “certificates of public necessity and convenience” (cab licenses) at 1,600. New Orleans also decided to treat the Certificates of Public Necessity (or CPNCs) as a “privilege” rather than as property. The average price for a CPNC in the secondary market reportedly is about $26,000. Legal challenges to the new rules have been unsuccessful, as of this writing.